
TiiK Political Issiks of tiik Timk. 



J:\ 



V Si^EECH 



HON. GEORGE W.iWRARV, 



SHCllI/rARV OF WAll 



DKI.1VEHED AT 



KEOKUK, IOWA, SEPTEMBER lOtli, 1878. 



WASHINGTON, i). C. 
NATIONAL URl'UBLICAN PUBLISHING COMPANY 

1878. 



'IIK roiJTirAl. ISSIKS OF TIIK TlMK. 



^ SFEECII 



IIOiN. GEORGE W.iFCRARY, 



SKCllETARY OF WAl! 



riKI.IVKKKD AT 



KEOKUK, IOWA, SEPTEMBER lOlli, 1878. 



WASIIIXCTOX, I). ('. 
NATIONAL KKI'IHLIUAN rUHLISHI.V(J (OMI'ANY 

187.S. 






3y traosfei 

]UL 30 1915 



THE ruLlTlCAl. ISSUES OF Till': TIM 



Fellow Citizens: 

I luivc uccei)ted with groat pleasure the invitation of thi- 
Republican State Central Committee to address my <>ld 
friends and neii;"hi)ors upon tin' political issues of the day. 
It has been my good tortune in the course of my official lile 
to receive many tokens of contidence from the jteople of this 
city, of all i»:irtics, and it is but natunit that L slioiiM 
desire on this occasion to siieak to you without hittcrncss, 
though with frankness; to treat my political opponents witli 
perfect fairness, while at the same time I. utter j.laiiily and 
distinctly my own opinions, and support them by such argu- 
ments as seem to me satisfactory. I will not assume upon 
all points to speak the sentiments of all Re[>ublicans. The 
Republican party is agreed ui)oa the truth and im[iortance of 
certain great [)rinciples, whicli, as we believe, must be em- 
bodied in legislation and enforced in administratioii to the end 
that peace and prosperity may prevail and free government 
prove to be grandly successful in our beloved country. But 
the Republican party is not narrow, bigoted, or intolerant. It 
not only permits, but by the very genius of its policy it encour- 
ages indciiendence in thought and action within certain 
reasonable limits, and if it did not it could not be the great 
and powerful and [irogressive organization that it is. Free 
men, free thought, free soil, free si.eech, have been among 
its grandest rallying cries from the begiiming, and to-day its 
motto is, ^'lu essentials, unity; in nou-essentials, liberty; in 
all things charity." 



TIIK KKrri!I,U"AN UECi»Rl>. 



I have no sympathy with the disposition manifested in 
certain ([uarters to sneer at the claim that the l\ei»ublican 



party is entitled to confidence and support because of the 
grand record it has made for itself and for the country in 
the past. I freely admit that we cannot stand upon that 
alone. I freely admit that we can neither win success nor 
deserve it unless we are right upon the i&sues of the present, 
but I insist that, with a party as with a man, character is an. 
all-important thing. I know that we as a party must not 
only point backward with pride, but also forward with 
promise and hope; but still it remains true that before you 
can safely trust a party with the exercise of power j^ou should 
be well assured of its patriotism, its devotion to the Consti- 
tution and th(i Union, — in a word, that it is inspired and 
controlled by men whose aspirations liave been in the past 
and will be in the future in the direction of liberty, jus- 
tice, equal rights, and the very best interests of all the peo- 
ple. IIovv are you to judge of this? Undoubtedl}^, by ref- 
erence to what the party has done in the past. I speak not 
now of particular individuals, but I utter a truism when I 
say, speaking of political organizations, that a party with a 
record of patriotism and faithfulness in the past, is to be 
trusted now in preference to a party with a record of disloy- 
alty and unfaithfulness. The party that stood by the country 
in the hour of peril, when the Union and all that it repre- 
sents were in issue ; the party that stood for freedom and 
against slaver^', for the government and against rebellion, 
for the war for the Union and against surrender — that stood 
for the right and maintained it, and carried the country to 
final victory under the banner of liberty and union, is enti- 
tled to the }»r()l'(>und gratitude and confidence of tlie Ameri- 
can })e(»[)le. And all this is true, notwithstanding the fact 
of which we are so often reminded by our Democratic 
friends, that tlie war is over, the [Iniou saved, and slavery 
dead. It is all ti-ue, notwithstanding tlie fact, if it be a fact, 
as I think it is, that no considerable number of persons, iSTorth 
or South, would revive slavery, renew rebellion, or dissolve 
the Union, if thej^ could. It is true simply for the reason 
that men and parties arc entitled to confidence and praise 



5 

for <:;o()(l public fiorvioo, for «xro:it itiid |ititrit>fic actions, and 
for fiiitlifuliiess in hours of ])nl)li(' |»('ril. 

Nor is this the political i:;ospcl ol" hate and vindiclivi.'n(3Srt, 
as(lainu'(l hy oui' ()[)ponents. It is perfectly consistent with 
the broadest nationality, and with an earnest desire to re- 
store harmony, t;-ood will, and lasting concord among all 
till' States, all the sections, and all the races of men in this 
land. Ueeause we claim credit lor the Republican party tor 
having been true to the Union throughout the dark <lays of 
the rebellion and lor lia\-ing carried th<> country through 
that struggle to victory and [)eace, it by no means follows 
that we may not sincerel}' desire 

ei>Ml'i,Ki'K IlKCONCLI-lA TloN 

and a hearty union with the people of the South. 

General Grant uttered the sentiment of the country when 
he said, " Let us have peace," and he was rightly applauded 
when he adopted, as one of the measures for securing peace, 
the recognition of, and hearty co-operation with, such of the 
late confederates as were willing to accept in good faith the 
legitimate results of the war, and to stand with him and 
wnth the Republican party upon the principles embodied in 
the amendments to the Constitution. While standing tirml}- 
by the great principles for the establishment of which the 
war of the rebellion was fought and won; while tirmly de- 
manding always and everywhere all the fruits of our suc- 
cess in that struggle, sound jiolic}^ re(|uires that we welcome 
to })olitical fellowship all who are noio heartily and honestly 
with us ui)on the great and essential principles of our [)olit- 
ical faith. Such I believe to be the s[)irit of the Republi- 
can party to-iiay toward the people of the South, We de- 
sire peace, union, prosperity, and happiness for the whole 
country. We know these blessings can be secured for our- 
selves, and preserved for those who come after us, only 
through the adoption of the great principles for which the 
Republican party stands — the [)rinciples of equal rights, 
equal protection, equal justice, and an e(|ually fair chance in 



the race of life for all citizens, higli and low, educated and 
ignorant, rich and poor, black and white. We must, there- 
fore, remain unalterably hostile to every man and every 
party not imbued with the spirit of these principles. We 
oppose the Democratic party because, as an organization, it 
is in spirit undeniably hostile to them. No doubt there are 
individual Democrats who would gladly see the most ample 
justice done to the colored race, and who sincerely desire 
protection, education, improvement, and perfect freedom for 
that people. But such Democrats are out of harmony with 
the Democratic party as a whole, and are in harmony with 
the Republican party. It is idle to expect the Democratic 
party of the nation to become the sincere and reliable friend 
and cham})ion of the rights of the colored people. This is 
a fact which every intelligent person understands and which 
must be taken into account in considering that party's claims 
u^Kin the people. 

PEACE AND PROTECTION. 

Tiie Republican party desires peace throughout all our 
borders, but holds that a peace that is worth liaving and 
that will last, must be based upon and spring from the en- 
forcement of equal justice and equal protection for all. We 
seek reconciliation upon this basis; we will have it upon no 
other. iSooner or later it will come upon our terms. When 
we armed the freedman with the ballot we gave him a 
weapon with which he will, in time, learn to defend his 
risrhts. Time will demonstrate that we made no mistake in 
conferring suffrage upon the emancipated race. It is not in 
the nature of things that a million of American freemen, 
with ballots in their hands, can be permanently ignored and 
trodden down. The Government of the United States, in 
my judgment, possesses ample power to provide for the pro- 
tection of its citizens in the enjoyment of all rights guaran- 
teed by the Constitution. Congress is expressly authorized 
to provide by apjiropriate legislation for the enforcement of 
the three great Amendments to the Constitution, and is by 



necessary im]>licati()ii iMiipowered to provido lor (mit}'*!!!!:; 
into cxo('uti(^n nil thf t-rovisions of that instrunuiut.. Tiu; 
Re])ul)li('an imrt v is in lavor of exorcisinij: this jiower just so 
far as niiiy 1)0 necessary to secure to all citi/ens alik<' tlie 
Itenetit of every provision of our national charter. The 
Iieoj.le of the States can, if tlicv \vill,hy respectiiii:; the rii!;hts 
of each otliiT, iind hy eiiiift inu' nnd cnfoi'cinLC appro|»riate 
State laws, amply protect the citizens of the I'nited States 
within their itorders, and thus rendei- it unnecessary for tiie 
Federal Government, ex('e[it in nirc- eases, to intervene for 
that purpose. 

Iowa, does this to the entire satisfaction ofevciylxxly. ihit 
if any State fails or refuses to afford such iirotcction, is the 
National Government powerless and the citizen defeneeless ? 
I say, No! Whatever is a crime against the United States 
or a violation of the national Constitution, may l)e jirovided 
ao;ainst by national law. When the States of the South 
shall, of their own accord, protect all citizens, without dis- 
crimination, as the States of the North do, we may expect 
to sec and welcome the return of peace and fraternity ; but 
without this, the only ])cace we can have is the peace of 
slavery — the jteace which the o[)pressed can always secure by 
submission. The South is now on trial. There is surely no 
excuse now, even by their own confession, for a continuation 
of the process by which, prior to March 4, 1877, all the South- 
ern States but three, and nearly all the congressional dis- 
tricts, many of them having confessedly large Republican ma- 
jorities, were carried over to the Democratic part}. When 
another election comes, we shall see whether, when left to 
themselves, the southern Democrats will allow a free ballot 
and guarantee a fair and honest count of the votes cast. If 
the process of " bulldozing" is continued, or if the plan of 
systematic fraud be adopted in lieu of that of systematic out- 
raire, the whole country will understand tinit it is because 
the white Democrats of the South do not intend to res[>ect 
and obey the amended Constitution, nnd are resolved that 
they, wlu'tlu-r in the niaiority or in t ln' minority, will rule 



in all that section. If, unhai)pily, this purpose should be 
made manifest by the logic of events, you may rest assured 
that the people of this country will find a peaceable and con- 
stitutional remedy. Of course, we are bound to recognize 
certain constitutional limitations upon the power of the 
United States. We know that we can, in time of peace, ex- 
ercise no strictly war powers ; and it is a fact which we are 
sometimes inclined to admit with regret, that there are 
many crimes which the United States cannot punish. It is 
not long since the country looked with horror upon the aw- 
ful massacre of the Chisholm family in Mississippi, and the 
public indignation was vastly increased because the United 
States could not, and Mississipin would not, punish the 
guilty wretches who perpetrated it. Ordinarily, the crime 
of murder is not within the jurisdiction of the Federal 
courts. 

But the right of Congress to provide for a fair election of 
Federal officers, and for the due enforcement of those pro- 
visions of the Constitution which guarantee the right of suf- 
frage and civil riglits to the freed people, is beyond dispute. 
The great, important, and fundamental diiierence between 
the two parties is this: under Republican rule this jurisdic- 
tion will, if necessary, be exercised ; under Democratic rule it 
would not be. That the freedmen in the South have in the 
past been maltreated and persecuted, and to a large extent 
denied their rights as free American citizens under the Con- 
stitution, is matter of history. The South itself has sutiered 
the heavy penalty which follows lawlessness, outrage, and 
the oppression of the innocent and helpless. The South will 
continue to suft'er in all her material interests until the Con- 
stitution and the law shall be faithftilly observed and en- 
forced throughout her borders, and all her people are fully 
and equally protected in their rights. I make no prediction 
as to the future, but I hope there will be found in the South 
a large and increasing element among the white race, to 
whom an ap[K^al for [)eace and j)rotection will not be made 
in vain. To the Bourbon Democrat, still clinging to the 



skeleton of slavery, iind approving; the utterances of Jeffer- 
son Davis, we cannot appeal with any hope of success. But 
I trust it may not be altogether without hope if we appeal 
to the other and better class of Southern white men to come 
and stand with us in a great national party pledged to give 
the country peace and prosperity, by giving to all the people 
equal rights under the Constitution and before the law. 

DEMOCRATIC ECONOMY. 

I shall not, on this occasion, weary you with many figures, 
but a few striking facts should be stated in illustration of 
the boasted economy of the Democratic party. When that 
party came into power in the lower house of Congress, in 
December, 1875, the presidential contest of 187G was loom- 
ing up in the near future. It was therefore deemed neces- 
sary by the leaders of that party to make a great show of 
retrenchment. It was accordingly announced, with a sounding 
of trumpets all over the country, that the Democratic House 
would reduce the annual expenses of the Government to the 
tune of some sixty millions of dollars. This claim was 
considerabl}^ modified before the end of the first session of 
the Forty-fourth Congress ; but after all of the appropriation 
bills of that session were passed it was claimed that an actual 
saving of nearly thirty millions had been secured. The 
appropriations for 1876-'7 had been arbitrarily cut down, so 
as to show a reduction of nearly that sum. It was charged 
by the Republicans that the larger part of this reduction 
was fictitious, being only a withholding or postponement of 
necessary expenditures to be provided for, .ifter the election 
by deficiency bills or in some other way. We charged that 
the arbitrary reduction was an electioneering trick to deceive 
the people, pending the presidential election. This was vehe- 
mently denied, but time has proved the charge true. Tlie 
books are now posted, and we find that since the ])residen- 
tial election deficiency bills have been passed amounting in 
the agirregate to $14,534,672.52, and that ai)out one million 



10 

of deficiency items have been provided for in the sundry 
civil bill, passed at tlie late session. We find also that 
the aggregate of appro^nnations for 187(3, when the Demo- 
crats of the House were preparing for the election, was 
$148,535,798.41, while the aggregate of the same appropria- 
tions for 1878, passed by the same party managers, is $172,- 
57(3,692.15, or an increase in 1878 over 1876 of $24,040,893.74. 
Xow, when it is remembered that the Republican pai-ty, 
while in power from 1866 to 1875, continuously and rapidly 
reduced expenditures, and that the last year of Republican 
rule shows a reduction of more than sixteen millions of 
dollars, and the last two years a reduction of over twenty- 
eight millions, I think we may fairly challenge a compar- 
ison between Republican and Democratic expenditures. 

SOUTHERN WAR CLAIMS. 

The Democrats of the jSTorth insist that it is not the pur- 
pose of their party to provide for paying disloyal claimants 
for damages growing out of the war. It is, however, a sig- 
nificant fact that no such denial comes from the Democrats 
of the South. On the contrary tlie Democratic Members 
of Congress from that section have regularly, at every ses- 
sion for years past, flooded Congress with bills for the pay- 
ment of these claims. If there is no purpose to push these 
claims, why are they kept alive ? Why are they kept con- 
stantly before Congress ? Why are they renewed from session 
to session, and kept always pending? You need not be told that 
the Democrats can gain and keep control of Congress only 
by tlie aid of a solid South, and you know well that a solid 
Democratic South would dictate the policy of the party. 
The Democrotic Representatives from the I^orth, few in num- 
bers and powerless when standing alone, would be compelled, 
as in the old days of slavery, to submit to the dictation of 
tlieir Southern leaders. The ])resentation of these bills for 
the relief of Southern war claimants means something or it 
means nothing, and, if it means anything, it means that the 



11 

claimants arc expcctini:; rolict' it" tlic Doiiincrats conic info 
power in both houses, and are determined to make in every 
Conijrcss n record tor vi!j:ilance \u tlieir ]»rose(;ution. Besides, 
it is of iniii()rt:iiic(> to rcnienilicr llint vast sunis of money 
raa^' be drawn iVoni the Treasury and })aid to disloyal claini- 
ants under tlie law as it now stands, if its execution is [.laced 
in the hands of tlie Democratic [»arty. There must, under 
existing;- law, be a lindini;- infavor of the chiimant's loyalty, but 
suppose you appoint a Southern (Claims' Commission, under 
the control of Southern Confederate Democrats, and leave 
to them the decision of the (piestion of loyalty; in that case 
how many claims will be rejected for disloyalty".' 

There are now on tile many thousands of claims in which 
the evidence is more or less conflicting on the [)oint ot" loy- 
alty. With a Confederate Democratic commission to jtass 
upon the question, it is my opinion that a vast sum would 
be drawn from the Treasury to pay rebel claims, without 
any open action in the way of the repeal of the law prohil)- 
iting the payment of any but loj^al claimants. 

It may be said that the House of Representatives has 
passed a proposed amendment to the Constitution, offered by 
]\rr. Conger, a Republican member from Michigan, to pro- 
hibit the payment of such claims. The })assage of this res- 
olution by the unanimcms vote of the Republicans and a 
majority of the Democrats is by no means a settlement of 
the question. The Democrats who voted for it, in most 
cases, regarded it as a political necessity to do so, and would, 
in case of its passage through Congress, rely with contidence 
and certainty upon the failure to secure the concurrence of 
the necessar}^ three-fourths of the States. If the door 
for these claims is once opened we shall live to see 
the loyal people of this conntry heavily taxed to pay tiie 
losses incurred by rebels engaged in an effort. In- force of 
arms, to destroy the Goverimient. And you may rest as- 
sured that the door will be opened if the Southern Bourbon 
Democracy shall ever regain the ]iower in the (.Tovermnent 
which tliey held before the war and which euahleil them 



12 

then, as it would again, to dictate terms to tlieir northern 
allies. 

THE FINANCIAL ISSUE. 

The Republican party points with justifiable satisfaction 
to its record upon questions of currency and finance. In an- 
swer to the clamor of our opponents about these questions, 
we appeal with confidence to an honest and intelligent peo- 
ple, and simply ask for a comparison of our financial situa- 
tion of to-day with that of ten years ago. The record is one 
in which not only every Republican, but everj^ citizen as 
well, should feel a just pride. The burden of our national 
debt has been steadily decreased. The aggregate of reduc- 
tion, since March 4, 1869, has reached the sum of $489,882,- 
735.16, whereby there is an annual saving of $31,208,542.50 
in interest. The aggregate of reduction since the close of 
the war exceeds the enormous sum of over $672,000,000 — 
about one-third of the present debt — and secures an annual 
reduction of interest of more than $48,000,000. Our national 
credit, always the unerring test of the wisdom and sound- 
ness of our national policy, has steadily and rapidly im- 
proved until to-day, for the first time in our history, we are 
able to borrow money, at home or abroad, at four per cent, 
interest; and the process of converting our six per cent, 
bonds into four per cents., is progressing satisfactorily. The 
sales of four per cent, bonds for sixty days past have aver- 
aged over six hundred thousand dollars per day. In 
spite of Democratic opposition, we have adhered to the pol- 
icy of simple honesty — the policy of keeping sacredly the 
nation's pledges ; the policy of treating the greenback as a 
promise to pay — an obligation, a debt, to be paid, not in an- 
other }>romise, but in dollars^ as })lainly expressed on the face 
of the j)aper ; and by this policy, and by this alone, the mo- 
ney of the })eople — the greenback — has been brought sub- 
stantially to par with gold. To show you how our national 
credit has been preserved and improved, it is only necessary 
to state what the record shows to be true, that since the in- 



18 

coiuiiii;- of the pivsi'iit adrniiiist rat i<»ii, flic ( iovciMiiiu'iit liiiH 
sold at pur $200,000,000 of 4i per ceut.,iin(l over $129,000,000 
of 4 per cent. lx)iids, largely to our own citizens. If this is 
not enough, let me call 3'our attention to the further most 
significant and gratifying fact, that the iirfiniuni on gold 
coin, which was34J per cent. March 4, 1800, and which was 
31 J per cent, on March 4, ISC)',), is now only one-half of one 
[)er cent. I know well tlait these results have not heen 
reached without some shrinkage in values and ('onse([uent 
loss and sutiering ; hut these were inevitahle, and ha[>[)ily the 
worst is over. We are hack again to a solid basis ; we are 
down to "hard-pan." We shall shortly resume specie pay- 
ments, thus releasing the specie in the Treasury, and then? 
with a circulating medium amounting to over nine hundred 
millions of dollars " that arc dollars," each and every one of 
which is worth precisely 100 cents, we shall resume our up- 
ward career of prosperity. The road to specie values has 
not been, in all respects, a pleasant one to travel. We have 
been compelled to come down from very high horses ; we 
have ceased to ride upon the wave of speculation and to 
revel in the excitement which came with the war and re- 
mained for a time after it was over, caused by a sui>eral)und- 
ance of currency of uncertain and shifting value — aji excite- 
ment which w^as unnatural and necessarily short-lived. 
When prices are measured by a fluctuating currency of doubt- 
ful value and uncertain quantit}', they must, of necessity, be 
fictitious. Let us rejoice that we are back again to the safe 
foundation of 

STABLE, EQUAL, AND HONEST DOLLAllS. 

Xor have the " hard times " through which we have passed 
to reach this end been an unmixed evil. We liave learned 
by ex[)erience lessons of economy, industry, prudence, and 
frugality, which our fathers understood and practiced, but 
which we had forgotten, and should not have learned in 
any other way. 



14 

i 

NO STEP BACKWARD. 

Tlie great question between the Republicans and their 
opponents is this : Having reached this solid footing, having 
secured a currency equal to and interchangeable with coin, 
shall we abandon it, together with all hope of resuming 
specie payments, and plunge again into an uncertain sea of in- 
flation ? Shall we have fiat money to be issued only by 
the Government, and in such quantities and at such times 
as Congress may direct ? Surely the people of Iowa cannot 
long hesitate about answering these questions. To abandon 
the policy which has brought us so mar to perfect financial 
health w^ould be as absurd and suicidal as would be the act 
of a man just recovering from a long illness who should, of 
his own choice, seek a relapse. 

The principal plank in the financial platform of our oppo- 
nents, and upon which Democrat;', Nationals, and Green- 
backers seem to agree, is this : The abolition of the national 
banks and the issue by the Government direct of so much 
currency as the wants of trade or the business interests of 
the country may demand. Let me speak briefly of the ob- 
jections to this policy. 

And first, why abolish tlie national-banking sj^stem ? It 
is admitted that it affords a safe, sound, and perfectly relia- 
ble currency, good alike in all parts of the Union, and fa- 
miliar to the people. Its vast superiority over the old Dem- 
ocratic State-bank currency is of course conceded. 

Any satisfactory discussion of the question whether this 
system should be abolished must include a consideration of 
the merits of the system proposed to be substituted for it. 
If you have objections to the national-bank system, you 
should be sure that you have not greater objections to the 
substitute which is proposed for it. Let us inquire, then, 
into the strength of the objections to the national-banking 
system, presented by our opponents, and follow this with 
a statement of our own objections to the new system proj)Osed, 
viz, the issue by the Government of all our currency. 



15 

Wluit arc tlir olt'n'ctiouH to tlir iiat ioiial-liaiikiiiuj system, 
as presenti'd and ur<;v(l by our i)ii|ii)iiciils? lii-t me ciiuiiu!!"- 
iite and answer tlieni. 

1. It is said that this systeMii is a ni()iin|i(ily i'i- s|n'ci:il 
privilege. lUit this is not true. National hankini;- is per- 
fectly free. Whoever has the desire and the means may start 
a national hank by complying with the law. Do our oi>i)0- 
nents desire to have a system of banking under which ])eo- 
ple without means can issue notes to cireulate as money V 
There are no restrictions upon the organization of national 
banks except such as are calculated to make the note-holdere 
— the peoi)le— absolutely secure, and these apply alike to all. 
This feature of tlie system affords a means of regulating the 
volume of the currency as perfect and safe as any we can 
have. If there is demand for currency, more banks will be 
started to supply it, and I think we may trust in this mat- 
ter, as in all other purely business affairs, the law of supply 
and demand. At all events, the claim that the national- 
banking system is a monopoly wdiich places the control of 
the currency in the hands of a few favored persons or corpo- 
rations, is absolutely groundless. 

2. Another objection to the system is that it costs the Gov- 
ernment a large sum annually in the shape of interest on 
the bonds used as the basis by the banks. This objection is 
equally unfounded. It is true the United States pays inter- 
est on the bonds held as security for the national-bank cir- 
culation, but it is not true tliat one tarthing of this interest 
would be saved by tlie abolition of the banks. If we should 
strike out of existence all the naticMial banks, the bonds 
would still remain, and the Government wonU continue to 
pay interest upon them unless prepared to re[iudiate. We 
would save nothing in the way of interest on our l)onds by 
abolishing the banks, but on the other hand we would lose 
a large sum in the form of taxes now paid by them. The 
taxes" paid by the banks to the State and National G(wcrn- 
ments, will average over sixteen millions of dollars per an- 
num. The 3im[)le truth, therefore, is that by abolishing this 



16 

system we would i;-aiii nothing in the saving of interest, and 
would lose at least $16,000,000 per annum in taxes. I do 
not say that our banking system may not be improved. 
Sooner or later, I have no doubt, it will be amended so as to 
use as the basis of it a four per cent, bond, but to abolish it 
and substitute an indefinite issue of greenbacks (and any 
issue left subject to the determination of Congress must be 
indefinite) would be the extreme of folly. 

3. It is sometimes said that the national banking system 
tends to concentrate and strengthen the money power. I 
submit that the national banking law is as free from this ob- 
jection as any banking system can possibly be. It is as free 
from it as any incorporation act can be made. It is as free 
from it as is any law authorizing the formation of corpora- 
tions to engage in any legitimate and honest business, 
whether it be trading, manufacturing, or banking. The 
money power would be just as potent, and probably far more 
potent if wholly excluded from the privilege of carrying on 
national banks, and obliged to invest in other enterprises. 
It is diflicult to see why the national banks are any more 
dangerous on this account than an equal number of private 
banks or other private corporations representing an equa 1 
amount of capital. This argument, if it means anything^ 
is aimed at the very existence of capital, and can be used 
with equal force against railroads, steamship companies, 
manufacturing corporations, and private bankers and 
traders. 

4. One further objection I have heard to the national 
banking system. It is that it contemplates the perpetuation 
of the national debt. In answer to this I have to say that 
whenever the Government wishes to pay any of the bonds 
now held by the banks, it is the right of the Government to 
pay them, provided they are due and payable. If by this 
mode the banks shall at some time in the future cease to 
exist, the country must when that time comes take care of 
the interests and the currency of the people. This can 
scarcely happen during the next quarter of a century, and it 



17 

is therefore ]>roiiiatui'i' to diseiiss if now. For iiiysfU", liow- 
ever, I have no hosltiition in saying that I hi-liev'e it would 
be for the best interests of the (iovcrnnirnt and the pi-ople 
to keep outstanding a sntficicnl ([uantityol' t'nur pt-r (('iit. 
bonds to furnish the basis of our nationahhank currency, i 
know of no other system of currency so stable, so sate, and so 
reliable. If a better system can be devised, when the time 
comes to pa}^ otf the bonds we can adopt it, but certaiidy 
the plan proposed by our o[)ponents is not such an one. And 
this brings me to consider, briefly, the objections to their 
plan. 

I. As already suggested the financial [»lan proposed by our 
opponents leaves the amo((?i< of currency uncertain, and tliere- 
fore of necessity leaves its value uncertain, for notliing is 
surer than that the value of a currency depends u[ion the 
certainty as to redemption, and this depends u[)Ou the (quan- 
tity to be redeemed. The all-important thing in any system 
of finance is stability. You must have an assurance that a 
dollar to-day will be exactly the same dollar to-morrow and 
next year. 

If the volume of the currency is to be regulated by con- 
gressional enactment from time to time, how can an}' man 
predict how many greenbacks the next Congress will au- 
thorize ? Who can tell what quantities may be issued to 
put an end to " hard times," or stave off a panic, or other- 
wise satisfy a clamorous constituency. Such a system would 
necessarily destroy all confidence, and prove in the end the 
worst possible. If carried on for a long period it could end 
in nothing short of both public and private bankruptcy and 
ruin. 

II. Another objection to the attem[)t to issue by act of Con- 
gress in time of peace, notes of the Government, to be a 
legal tender and circulate as money, is the grave doubt 
which exists as to its constitutionality. 

Before entering upon a policy of this character we should 
be well assured that it will stand the test of the Constitu- 
tion, for if we should abolish the banks and issue a national 



18 

currency in lieu of the bank bills, only to find in the end 
that the new money cannot be made a legal tender, dire 
confusion and disaster would result. The question is, has 
Congress in time of -peace the power to authorize the issue of 
Government notes to circulate as money, and to make them 
a legal tender? The Constitution empowers Congress ""to 
coin money," but it is not pretended that this includes power 
to 79/•^■?^^ money, or to issue paper money at all. The power 
to issue greenbacks and to make them a legal tender, has 
been asserted as an implied power, and it has been held by a 
bare majority of the Supreme Court of the United States, 
after a long controversy, that the legal-tender act of 1862 
was valid. But this decision rests mainly, if not wholly, 
upon the ground that the issue of legal-tender notes was 
necessary as a war measure, and therefore a power implied 
as a necessary part of the power to declare and carry on war. 
The first decision of the Supreme Court was the other way, 
but with a full bench and a re-argument, tlie final result 
above stated was reached by a vote of five judges to four. 
No one can read the opinions of the majority without being 
iuipressed with the importance given to the fact that the 
legal-tender act was a loar measure. Thus Mr. Justice Mil- 
ler said, "The power to declare war, to suppress insurrection, 
to raise and support armies, to provide and maintain a navy, 
to borrow money on the credit of the United States, to pay 
the debts of the Union, and to provide for the conmion 
defense and general welfare, are each and all distinctly 
and specifically granted in separate clauses of the Constitu- 
tion. We were in the midst of a war which called all 
these powers into exercise and taxed them severely." And 
again, speaking of the necessity which compelled the pas- 
sage of some such act, he said : " The coin in the country, 
if it could all have been placed within the control of the 
Secretary of the Treasury, would not have made a circula- 
tion to answer army purchases and army payments, to say 
nothing of the ordinary business of the country. A gen- 
eral collapse of credit, of payment, and of business seemed 



10 

inevitable, in wliidi taitli in tin- ahllity <»l' tin' < invcrnnicnt 
would haw Itccii (lestroycd, tli(.' rehi'Uioii would have tri- 
uiii}»lied, the States would have been left divi(UMl, ami \\\r. 
people impoverished. The National Govt'i-iiMicnt would 
have perished, and, with it, the Constitution which we arc- 
now called up(Mi to construe with such nice and critical ac- 
curacy. That the legal-tender act i)rcvented these disastrous 
results, and that the tender clause was necessary to prevent 
them, 1 entertain no doubt/' (8 Wall., t):)o.) Mr. Justice 
Strong, who delivered the tinal ()[»inion of the majority, pro 
sented forcibly the same view, and among other things said: 
*' Plainly to this inquiry a consideration of the lime ichcn 
mid the circumstances in which the (lovernmett then stood, is 
important. It is not to be denied that acts may be adapted 
to the exercise of lawlul power and apjiropi-iate to it in sea- 
sons of exigency, which would be inaiipropriate at other 
times." (12 Wall., p. 540.) And Mr. J ustice Bradley declares 
that the power in question is "a power not to be resorted to 
except upon extraordinary and pressing occasions, such as 
war or other public exigencies of great gravit}- and impor- 
tance." (12 Wall., 567.) 

It is entirely clear that the legal-tender cases settle noth- 
ing except that Congress had the power to issue legal-tender 
notes in the midst of the war and when the life of the na- 
tion was to be saved thereby, and even this was decided by 
only a bare majority of the court. A\'lio will he hold enough to 
say that an act of Congress, passed in time of peace, justified 
by no exigency or emergency, making the iSTational Govern- 
ment the banker for the people and providing for indefinite 
issues of paper currency to circulate as money and be a legal 
tender would be sustained? At all events, such an exi)eri- 
ment would be exceedingly dangerous and should not be 
adopted, even though its success might promise to be a bles- 
sing, much less when success would be a disaster scarcely 
less ruinous than failure. 

III. To adopt this jiolicy would be a shameful and disgrace- 
ful repudiation of an express promise made by the nation to 



20 

its creditors. The promise I refer to is embodied in the act 
of Congress of June 30, 18(34, entitled "An act to provide 
ways and means for the support of the Government." This 
act provided for the issue and sale of bonds of the United 
States in order to raise money to carry on the war. It was 
of the utmost importance that ca})italists should be induced 
to subscribe for these bonds, and thus furnish money needed 
to carry on the war. Indeed, the salvation of the country 
depended upon our ability to place our bonds. It was at 
that time foreseen tliat Congress might be urged to issue large 
quantities of greenback notes, and thus im[)air the nation's 
credit and interfere with the pa^'ment of the bonds about to 
be issued. To reassure capitalists upon this subject and to 
induce them to come forward and loan us money in that 
time of dire need and extremity, the following solemn prom- 
ise was made by the United States and embodied in the act 
I have referred to: 

"Nor shall the total amount of United States notes issued 
or to be issued ever exceed four hundred millions of dollars, 
and such additional sum, not exceeding fifty millions of dol- 
lars, as may be temporarily required for the redemption of 
temporary loans." (13 Stat, at Large, p. 219.) 

Largely by the means of this pledge we succeeded in sell- 
ing our bonds and in raising money to carry on the war for 
the suppression of the rebellion. The Government may 
have poiver to repudiate this promise, but I am sure no hon- 
est man can say upon his conscience that it ought to be done. 
'No nation can afford to disregard its plighted faith. Good 
faith in a nation is its very life-blood, without which its 
very existence must cease. It is essential to credit and 
credit is essential to existence. The Republican party of 
Iowa and of the Union will, I am sure, say with one voice, 
let our Government be true and faithful in keeping all its 
pledges in letter and in spirit. 



APPENDIX 



THE PRESENT SITUATION OF AMERICAN 
FINANCE. 



Letters from llio Actini!; Socrolary of the Treasury and romj)- 
Iroller of llic ("iirrcni'V. 



[Durinii" his remarks on Fiiiiincc Secretary McCrary liad 
read the foHowing letters: J 

Treasury Department, 

Washington, August 19, 1S7S. 
Hon. George W. McCrary, 

Secretai'!/ of War : 
Dear Sir : In reply to your letter of this date permit me to say — 
First. The public debt of the United States, less bonds issued to 
Pacific railroads, and less cash in the Treasury March 1, ISCI!. amounted 

to !{;-2,707,S.')(),0()0 '22 

August 1, 1878 2, or), .-,80, .124 85 

Total reduction since ]\Iarch 1, 18G(') 072.275,475 37 

Second. The annual interest due on the public debt of March 1, 186G, 

amounted to sf 14:5, 73 7, 869 55 

Annual interest August 1, 1878 05,181,007 50 

Reduction of annual interest 48,55(),802 0.) 

Third. The public debt March 1, 1800, amounted to. 4:2,525,403,200 01 
August 1, 1878 2.035, 580,524 85 

Total reduction since :March 1, 180ii 489,882,735 10 

Fourth. The annual interest due on i.>il)lic debt of :March 1, 1809, 

amounted to ij; 120, 389, 550 00 

Annual interest August 1, 1878 95, 181,007 50 

Reduction of annual interest 31,20s..( J2.i 



22 

Fifth. The average amount of State taxes paid by national banks fo 
the five years, 1872 to 1876, inclusive (estimated for 1873 and 1873 from 
data derived from reports for other years, no reports of State taxes for 
those years having been received), was $9,244,740 00 

And the average amount of national taxes for the years 1873 to 1877, 
inclusive, from the same source, was $7,124,305 (t3 

Sixth. The total amount of 4^ per cent, bonds sold at par since March 

1, 1877, is $200,000,000 

And the total 4 per cent 139,000,000 

Seventh. The premium on gold coin in New York March 3, 1866^ 

34^ 
was "^^s 

March 4, 18G9 ^If 

And at this date ^^s 

Eighth. The average daily sales of 4 per cent bonds for the past sixty 
business days has amounted to $686,875 

Yours, truly, 

JOHN B. HAWLEY, 

' Actinff Secretary of the Treamry. 



Treasury Department, 
Office of Comptroller op the Currency, 

Washington, August 22, 1S7S. 
Sir : In answer to your inquiries of the 21st inst., I have the honor 
to present the following statement : 

First. Amount of national bank circulation outstanding August 21 , 

1878 $323,371,962 00 

Second. Amount of United States notes outstanding, 
viz : 

Legal-tender notes $341,681,016 00 

Old demand notes 62,267 00 

Fractional currency 16,406,928 00 



363,150,211 00 



Third. Gold coin in Treasury, Au- 
gust 10 185,273,016 85 

Standard silver dollars 10,386,266 00 

Goldbullion 0,539,657 89 

Silver bullion 6,812,812 41 

Fractional silver 5, 095, 246 38 



214,106,999 53 



Very respectfully, 

lion. Geo. W. McCrary, 

Secretary of War. 



J. S. LANGWORTHY, 
Acting Comptroller. 



LIBRftRY OF CONGRESS 



013 789 638 2 ^ 



